Banca Transilvania seeks to raise 41 million euros from shareholders

Banca Transilvania, the largest Romanian-controlled bank, intends to increase its share capital by about 217.7 million RON (65 million euros), by capitalising the net profit of 2006 and the premiums from the share issues of the previous years, as well as by capital contributions from shareholders.
BT’s announcement about the share capital increase, one of the most eagerly awaited events by the investors on the Bucharest Stock Exchange over the last few years, was met with investors’ reluctance this time, with the bank shares closing the trading session yesterday with an increase of only 0.9%.
BT’s Board of Directors proposed to shareholders to capitalise the reserves made from 2006’s net profit, 84.16 million RON (25.2 million euros), and the issue premiums collected from the capital increase conducted last year, which amount to 94.2 million RON (28.2 million euros).
In exchange for these amounts, the bank will issue about 1.78 billion new shares with a par value of 0.1 RON/share, which will be disbursed to shareholders for free. Each shareholder registered by the registration date should get about 45.3 bonus shares for every 100 shares held.
The 39.3 million RON (11.7 million euros) difference should be secured through a capital increase by capital contribution from shareholders. To that end, Banca Transilvania is planning to issue 393.3 million new shares, which will be offered for subscription to shareholders at 0.35 RON/share, which includes the par value of 0.1 RON/share and an issue premium of 0.25 RON/share.
Each shareholder will be allowed to subscribe 10 new shares for every 100 shares held. This is how the bank intends to raise 137.6 million RON (41.2 million euros).
“The funds raised as a result of the capital increase will be used for our investment plans. We will invest about 30 million euros in the bank this year, to expand the network, develop the IT system and build the regional centre in Baneasa. We will also invest significant amounts of money in the subsidiaries of the group, insurance, leasing, mini-credit and factoring,” Robert Rekkers, Banca Transilvania general manager told ZIARUL FINANCIAR.
The proposal to increase the share capital will be debated during the General Meeting of Shareholders called for April 25, 2007.
Banca Transilvania has been one of the most active issuers on the capital markets, as the growth of the bank relied heavily on capital increases performed on the Stock Exchange. In its almost ten years on the Stock Exchange, the bank has conducted 13 capital increases, so that its share capital currently stands at 393.3 million RON (117.7 million euros).
The strong organic growth, as well as the bonus shares distributed from the net profit every year have made Banca Transilvania shares some of the most profitable on the Bucharest Stock Exchange.
The bank reported preliminary net profit worth 120.2 million RON (35.3 million euros) for last year, an increase of 20% on 2005.
The assets of the bank reached 2.4 billion euros at the end of December, driving it up to the fifth place in the Romanian banking system, with a 4.7% market share.